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The definition of Community Theatre differs in the US from the UK. In the UK the term 'community theatre' is used for a movement of professional theatre companies which developed in the 70's, 80's presenting plays for specific communities with common interests - local, or regional. The plays represented the lived experiences and concerns of these communities, had a radical approach and were performed in local community centres. The best known company was 7.84 ('7% of the population own 84% of the wealth') touring working class areas. The term in the UK is now used for a show toured by a company committed to local issues and reflecting their interests.

Community Theatre, a completely separate entity in the United Kingdom from 'amateur theatre, amateur dramatics or amdram, ' is a very popular form of theatre in which all or most of the participants are unpaid or "amateur" in the most literal definition of the word.

In the US Community theatre generally resembles professional theatre in all ways except in the unpaid nature of the artists. Though community theatres are generally more traditional in nature in US, in UK they are innovative, all forms of theatre are practiced in these non-professional venues. In US they are especially well known for producing musical theater and children's theater. Many companies that are made up of unpaid members do not identify themselves as community theatre; usually the distinction between a "standard" theatre group and a community theatre is made by the company itself. Community theatre provides the opportunity for diverse individuals, many of them in other professions, to create plays and have the satisfaction of being part of an active social and artistic community. Often this involves individuals who have little or no background in theatre or the arts but who wish to get involved and to develop skills in theatre.

Community theatre in its US form and Amateur Dramatics in the UK is often ridiculed or lampooned, reputed to have lower quality than professional theatre. However, a great number of community theatres are respected establishments in their community, and the great majority of professional artists in the theatre report that they began their career in non-professional theatre.

A growing number of community theatre companies and groups now sponsor the writing, production and performance of original theatrical and dramatic work, as opposed to the usual performance of well-known musicals and plays. These original works often involve local writers with strong sense of the community in which they work and whose work touches on themes relevant to community-based audiences mirroring the work of the UK Community Theatre professional companies.

Community theatres range in size from small groups, led by single individuals performing in borrowed spaces, to large year round companies with elaborate well equipped theatres of their own. Many community theatres are successful non-profit businesses with a large active membership and, in some cases, a full time professional staff. Because the performers and other artists are also involved in other aspects of their community, non-professional theatre can develop a broad base of support and attendance among those who might not normally patronize the professional arts. Community theatre is in fact well documented as being the most widely attended venue for theatre in America and Australia.

Community theatre is often seen as adding to the social capital of a community, in that it develops the skills, community spirit and artistic sensibilities of those involved. It can also create a place for debate, self-expression and interactivity that is important for the health of a community. When this involves children, for example, it can disarm problems with delinquency and bring a forum for youth to have a say.

See also: Pro-Am Community Theatre.